DRAM revenue fell to 8 year low in first quarter

Losses among DRAM makers mounted to $15.2 billion over last eight quarters, Gartner said

The global DRAM industry continued to shrink in the first quarter of this year as revenue fell to an eight year low and losses mounted, according to preliminary figures released by Gartner on Monday.

The market researcher said DRAM market revenue fell 41 percent year-on-year to US$3.57 billion in the first quarter, the lowest the industry has seen since the fourth quarter of 2001.

The first quarter figure also showed a decline of 18 percent from $4.38 billion in the fourth quarter of last year.

The DRAM industry downturn started two years ago after factory overbuilding led to a chip glut.

The global recession further hurt the DRAM industry by slashing sales of the product most of the chips go into, PCs.

Worldwide PC shipments fell 6.5 percent year-on-year in the first quarter, according to Gartner.

German chip maker Qimonda took the worst revenue hit during the quarter, Gartner said. The company declared bankruptcy early in the quarter and slashed production, selling chips mainly from inventory.

Samsung Electronics, the world's largest memory chip maker, performed best last quarter. Revenue at the South Korean company fell but it increased its market share lead.

"Samsung's financial muscle and technology lead give it an advantage other vendors can only dream about in such conditions," wrote Andrew Norwood, a senior chip analyst at Gartner, in the report.

Hynix Semiconductor and Micron Technology also experienced revenue declines during the quarter but increased their market share.

Hynix remained the second biggest DRAM maker, while Micron captured the third place ranking from Elpida Memory of Japan, according to Gartner.

Elpida slumped to fourth.

Losses among DRAM makers continued to mount during the first quarter. Major DRAM vendors lost a combined $2.5 billion in the quarter, Gartner estimated, compared to $2.9 billion in the fourth quarter of last year.

The companies have lost a total of $15.2 billion during the past eight quarters.

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Dan Nystedt

IDG News Service
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